Since the launch of Bitcoin’s whitepaper in 2008, cryptocurrencies have had a massive impact in the world of finance. Here is our quick guide if you want to take the first step into crypto trading.
At the end of April 2022, the cryptocurrency market cap stood at US $2.04 trillion, according to CoinGecko. As of March 2022, there are 18,000 cryptocurrencies in the market. However, many of these cryptocurrencies have small trading volumes and little to no following.
Judging by trading volume, the top cryptocurrencies are Bitcoin (BTC), taking up 40% of the total crypto market cap, then Ethereum (ETH), Stellar (XRP), Dogecoin (DOGE), and Terra (LUNA). Other coins worth also mentioning are Cardano (ADA), Solana (SOL), Binance Coin (BNB) and Litecoin (LTC).
Another common term in the cryptocurrency market is altcoins. The definition of an altcoin is anything that isn’t Bitcoin. The foundation of altcoins is the same as that of Bitcoin, but many altcoins have taken this principle and utilized it to either achieve alternative aims or fix a perceived flaw in Bitcoin.
Everyone appears to have a different motivation for investing in cryptocurrency these days. Whether it’s because they believe in the underlying technology, blockchain and its decentralization, or because of the hype created on social media, cryptocurrencies can be a smart way to grow your capital.
How to get started with crypto trading
The first step is to find a cryptocurrency exchange platform. The biggest exchanges by trading volume are Binance, Coinbase, FTX, Kraken, and KuCoin. It is usually relatively simple to open an account with them; all you need to do is provide some personal information from your bank account to the country in which you reside.
A respectable exchange will guide you through the KYC (Know-Your-Customer) process. This process varies from exchange to exchange, but often you will be required to provide a photo of an identity document (e.g., a passport or a government-issued ID card, etc.). This process proves that you are who you claim to be and protects the platform from any illicit financial activity.
There are two kinds of exchanges: centralized (CEX) and decentralized (DEX). Making a quick comparison: CEXs can offer better features. They provide a more comprehensive range of options as they support hundreds of cryptocurrencies and tokens. In contrast, DEXs primarily focus on Ethereum and do not support many tokens on other networks.
It is worth noting that you don’t need to choose one exchange and stick with it forever. You can choose to open accounts on different exchanges to explore the different options for trading pairs. A trading pair can be Bitcoin/Ethereum, Bitcoin/Litecoin, Bitcoin/Tether (USDT), etc.
Many crypto exchanges offer a spot market that allows users to make real-time trades. Investors should note that spot trading requires traders to hold the underlying crypto asset. Spot trading opens the doors to another strategy–day trading.
What trading tools do crypto traders use?
Usually, an exchange offers different tools and order types for crypto trading on the spot market. One of these order types is called a “Stop-Loss.”
You can set up a stop-loss plan to safeguard your capital. It works like this: when the price of an asset falls below your designated stop price (your minimum), a Stop-Loss order is triggered, so your chosen asset will be automatically sold. Any trade comes with its risks, and if you are not using a Stop-Loss, you risk losing more than you are willing to.
Another order type is called “Take Profit,” or “Target”. It works like this: traders place this order higher than the price that the asset was purchased at, to make a profit.
The disadvantage of trading on an exchange is that you can only place a Stop-Loss or a Take-Profit order. You might alternatively select the one-cancels-the-other-order (OCO) option. Only one of these orders is completed, and the other is immediately canceled, which means you are not protected against unprecedented volatility. Therefore, it’s not ideal if you want to make the most of your crypto trading.
How CoinPanel solves this problem
This is why CoinPanel created the Full Trade feature that allows you to set your entry price, in most cases, which price to buy the crypto asset at, and exit prices, including multiple sell-targets and stop-losses.
Once you’ve set all of your trades to your desired levels or the crypto signals you’re choosing, you can click “Full Trade,” where you’ll have to re-confirm your transactions.
Then, your trades will be displayed under “Open Orders,” where you’ll be able to observe the trade’s progress and trigger conditions. Essentially, CoinPanel will do all the hard work for you, and you won’t need to worry about missing out on an excellent trading opportunity.
CoinPanel is an all-in-one platform that allows you to trade cryptocurrencies easily while keeping track of your investment. Traders will be able to capitalize on the potential of a volatile market while also minimizing the risks connected with the ever-expanding crypto market.